The European Commission is considering imposing tariffs on cheap Chinese electric cars to protect domestic industries, but experts believe that the proposed tariffs may not be enough. Researchers argue that tariffs of 50 percent are necessary to prevent a flood of Chinese electric cars in Europe.
According to the Financial Times, the Rhodium Group estimates that Chinese manufacturers would still be able to make profits even with tariffs set at the high end of the scale. However, temporary tariffs may be put in place as early as May or June while a decision on permanent tariffs is made by the end of the year.
One example given is the BYD Seal U SUV, which is sold for half the price in China compared to the EU. Import and customs costs add around 13,000 euros to the price in the EU, while Chinese production costs are low due to large car factories, allowing them to price cars competitively in Europe.
Chinese companies are already gaining market share in Europe, with projections showing that they could capture 20 percent of the Union market by 2027. The impact of tariffs extends beyond Chinese brands and affects companies like Tesla who manufacture cars in China and export them to Europe. Additionally, Chinese companies are investing in factories within the EU, with BYD already building one in Hungary. Last year, four new Chinese brands entered the Finnish market, with more expected this year as well.
Overall, there are concerns about how effective these tariffs will be at protecting domestic industries while also maintaining a level playing field for all manufacturers. It remains to be seen what action will be taken by European policymakers and how it will impact both consumers and manufacturers alike.